If a slum area needs to be renewed, and there are two competing proposals, the community should have a direct voice in the choice.

Elections are a small cost to insure free public knowledge and support. The many economic and social manifestations of any renewal project affects the whole community. The whole community should be intimately involved to insure success. A referendum is the best method for obtaining support and insuring this success.

Referendums have been held in a number of communities on some phases of urban renewal projects-bond issue, establishment of a local renewal authority, or project approval-over the past few years. Approvals and rejections are almost equally divided. I submit the following chart documenting recent referendums:

60-878-66-pt. 2

1 Bond issue got majority but not required 65 percent.

2 Voters transferred by 8 to 1 margin responsibility for urban renewal program from housing authority

to mayor.

3 Approved program of storm drain centers as support noncash grant in aid for urban renewal program

Mr. Chairman, support for my bill has come from many quarters. The amazing thing is that, while I have not publicized the proposal or solicited support, letters and petitions of support have come to me in unusual quantities. Approximately 300 persons have signed petitions favoring my bill, H.R. 7434. The petitioners come from Chicago,

Ill.; Kalamazoo and Battle Creek, Mich.; Minneapolis and Duluth, Minn.; Lafayette, Ind.; Bloomington and Fort Wayne, Ind.

To complete the record, Mr. Chairman, I submit the text of a letter from Mr. Charles H. Goddard, Bloomington, Ind. :

MARCH 4, 1966.

DEAR MR. TALCOTT: Indiana's experience with urban renewal and redevelopment as it is called in Indiana, shows the need for those who are affected by urban renewal to have an opportunity to express themselves by referendum. Too often the municipal officials have seen urban renewal as an opportunity to get some money, and to clear away homes for some project which they think might benefit the city, without consideration for the people involved. This is not a matter of slum clearance because "blighted" areas are not supposed to be slums, although some slums are certainly blighted.

Indiana has the Redevelopment of Cities and Towns Act of 1953, with amendments, which describes and defines what a "blighted" area is. Because of these blighted conditions, as so described, an agency or commission may be set up, a declaratory statement made, and the powers of eminent domain exercised. The statute makes it clear that these powers are granted because of the existence of blight blighted areas, the use of which causes an increase in crime and disease, constitutes a menace to the health, safety, morals, and welfare, and which conditions necessitate excessive expenditures of public funds for crime prevention and punishment, public health, and safety. Unless these conditions exist there is no jurisdiction so to act. Nevertheless, many of the municipalities have undertaken to form the public agency required under the Federal act, to receive funds, without any effort to establish that these blighted conditions exist, and in most instances they do not exist to a large extent in said area. Consequently, the acts of the cities are illegal, and is subject to injunction since these acts are without jurisdiction.

Although the Federal law provides for some community approval and participation, those who are affected by these projects have no opportunity to express themselves in an effective way. The public hearing provided under the State law, has no definitive effect upon the actions of the commission and in most instances is ignored. They brush aside the protests of the homeowners, and call the bulldozer,

In Bloomington, there was no effort to obtain the sentiments of the people in the area, nor was there any attempt to establish that the area was blighted according to the act. The testimony at the public hearing showed only talk among officials but no securing of evidence to prove that it was blighted.

In Jeffersonville, the disregard of the people's rights was even more extreme. They sent inexperienced housewives around to make a so-called survey. None of the indicia of blight were present. No attempts were made to show it was blighted. New homes and developments had been built in the midst of the socalled blighted area.

Now a second effort is being made to tear down most of Jeffersonville in the same indifferent and callous disregard for the rights of the homeowners. Similarly no consideration is being given to the concern of the people most seriously affected.

In Batesville, Ind., we have an even more outrageous and high-handed disregard for peoples property. The powers that be in Batesville decided that Batesville had not grown as fast as the rest of the State so they plan to condemn two of the best business district blocks, which show no evidence of blight, tear the buildings down and invite a supermarket to come in and build, hoping it will bring in new business. The businesses which are being torn down, in many cases will not be able to reestablish themselves in a new area. because of the inadequate prices given for the buildings and the cost of new buildings.

Of course, one of the most outrageous features of these programs is that in most cases the people are not given prices which will enable them to buy homes of comparable character elsewhere, and many of them being older persons, cannot readily obtain loans for purchase. Consequently, many of the homeowners are forced to move into inadequate homes, or to live in hole-in-the-wall places. Of course, many of these people who have lived in blighted homes, when moved into new homes, will carry the blight with them. Eradication of blight is not accomplished by moving the blighted into new homes, any more than we change people's character or habits by buying them new clothes. We only change people by changing them inside, by giving them new ideals, by giving them a belief

in themselves as children of God, and so that they have a responsibility to and a need for God. All people need a belief in the loving God, and none more than the unfortunate.

In some communities such a La Porte and Logansport, urban renewal has been defeated when the voters have put pressures on the city council. However. since in some municipalities the city leaders are not as responsive to the wishes of the people, a referendum is necessary to make clear whether the people approve and authorize such activities.

We have additional evidence to support your bill if you desire it.

Sincerely,

CLAUDE H. GODDARD.

Mr. Chairman, the evidence proves the need for improved urban renewal procedures. The whole urban renewal program will be immeasurably strengthened by passage of my bill, H.R. 7434, providing for a public referendum for urban renewal projects. I urge the support of your subcommittee. Thank you.

Mr. BARRETT. Thank you, Mr. Talcott.

The next witness will be Mr. Ed Butler, chairman of the Lenders Committee, National Home Improvement Council; accompanied by Thomas C. Brickle, legislative representative, National Lumber & Building Material Dealers Association.

Please come forward, please. Please feel at home here. We are hoping that we can move quickly this morning and give you a chance to read your statement through and then the members may want to question you.

STATEMENT OF E. T. BUTLER, VICE PRESIDENT OF INVESTORS SYNDICATE CREDIT CORP., MINNEAPOLIS, MINN., ON BEHALF OF THE NATIONAL HOME IMPROVEMENT COUNCIL LENDERS COMMITTEE; ACCOMPANIED BY THOMAS C. BRICKLE, LEGISLATIVE REPRESENTATIVE, NATIONAL LUMBER & BUILDING MATERIAL

DEALERS ASSOCIATION

Mr. BUTLER. Mr. Chairman and members of the committee, I am E. T. Butler, vice president of Investors Syndicate Credit Corp., Minneapolis, Minn., and I am speaking for the Lenders Committee of the National Home Improvement Council, of which I am chairman. Why public interest will be served by amending title I of FHA program: Banks, savings and loan associations, and other financial institutions have made more than 28 million home improvement loans under the FHA program. Thirty years of experience leaves undebatable the positive benefit to the social and economic welfare of our country of this particular Government-sponsored program. For those 30 years title I has been the standard against which all other home improvement financing plans have been measured. Title I, however, has failed to keep pace with changing economic conditions. The cost to the borrower is the same as that set by law in 1934, and during this interim the cost of living and the cost of doing business has increased manifold. For 10 years there have been no changes in title I in the maximum amount of loan available or the maximum term of the loan and the rapidly declining use of title I is shown in the following table:

The Lenders Committee of the National Home Improvement Council is convinced that unless changes in title I are effected, then the demise of title I is inevitable. Already its effectiveness has diminished to the detriment of the consuming public as indicated in the above table.

The Lenders Committee recommends and urges adoption of the administration-supported amendment, H.R. 13064. We urge adoption of that part of H.R. 13064 which has to do with federally insured property improvement loans, and further recommend that title I be put on a sound competitive basis by increasing the maximum amount from $3,500 to $5,000 and extending the maximum term from 60 months to 84 months.

During the last year the Federal Home Loan Bank Board saw fit to authorize Federal savings and loan associations to increase their limit on home improvement loans to $5,000 and 8 years' maturity.

This step by the Federal Home Loan Bank Board is in recognition of the fact that the cost of home improvements has steadily risen during the past decade. Today the consumer needs loans for amounts greater than the statutory limit of $3,500, and the consumer also needs a greater period of time to repay these loans than the statutory limit of 60 months; thus a steadily growing number of consumers are learning that their needs cannot be met under the title I home improvement program.

The FHA, an unusually knowledgeable, and insofar as title I is concerned, a supporting agency, is undoubtedly aware of what is going on in the money market today. The consumer is the one who suffers at any diminution of title I. Because title I has not been updated to meet economic changes, the dealers and contractors, who control the financing of the majority of home improvement transactions, have turned to sources other than title I. These sources meet the requirement for larger amounts and longer terms; however, the cost to the consumer is immeasurably greater, and what is more important these conventional plans do not have the protective devices afforded the consumer by title I. In many of them

The consumer is the victim of shady, deceptive, and costly practices.

He may be led into refinancing the mortgage on his home with the inclusion of auto loans, doctor and hospital bills, and all manner of obligations which he would be well advised to retire more promptly.

Much too frequently he is the victim of excessive finance charges which often skyrocket to as high as 20 percent. kickbacks to dealers, payment of points for refinancing, brokerage fees, and other hidden

costs.